When multiple people inherit property from an estate, the option of buying out the inheritance arises. The phenomenon occurs generally with siblings but anyone that has been named in a will can become a joint owner of an estate with an equal share. Sibling buyout agreement arises when one person wants to keep the property while the other/others want to sell. This issue can be rather difficult to navigate through without legal advice if the involved parties can’t come to agreeable terms.
If your parents or another relative has left you or your siblings a house together in their probate will, you are posed with multiple options on what to do with the property. In almost all cases you would have an equal share unless stated otherwise in the will.
Buying out an inherited house
If you as well as your sibling can agree on one of you keeping the house and the other selling, the process is quite simple. All you need to do is pay out your sibling cash for their share of the real estate property while they sign the deed over to you. If you’re willing to take on the debt, you can get a mortgage for half the value. This would require you to pay closing costs thought you might need an appraisal to determine the value of your home.
You can also set up a private arrangement with your sibling if you can’t get a mortgage. Be sure to spell out how much you would be paying for the other half of the property as well as the interest rate in the contract. It is also essential to specify monthly payments and how long until the house is paid off. The key is to have all these conditions in writing to avoid problems in the future. Also, record a deed of trust to recognize the arrangement as it gives the other person the ability to foreclose if you fail to make the payments.
Refinancing inherited property
If you are interested to keep the property but your siblings are interested in selling it, you need to come up with the necessary cash to complete the transaction for your share. Traditional lenders such as a bank generally won’t provide a loan for a property in an estate or trust with other owners. Your best option would be to find a hard money lender for estate funding. These loans are also known as trust loans, inheritance loans or probate loans.
Once the refinancing of the estate is complete, the title of the property goes to the heir who is buying the rest of the property from their siblings. They have the option of getting a refinance loan from the bank for a lower interest rate.
United Farm Mortgage can help you with any issues relating to Sibling Buyout Agreements. Ensure that you contact them for any information relating to the same!